The Cutter Report – Boston Real Estate Trends: April Update

It’s April 2014, and this is the Cutter Report. Spring has arrived in Boston, and along with it, first quarter numbers for the Downtown real estate market. Let’s talk specifically about the Boston Luxury market for starters. For homeowners at these properties, the news just keeps getting better. The average price per square foot in the overall Boston condo market hit an all-time high in the first quarter, and the Boston Luxury sector reflects this with a YTD number at $1035 per foot.

Boston Luxury Properties

This number is driven primarily by sales at Millennium Place, where 89 sales closed, accounting for 75% of activity.

The average is also boosted by two sales in particular: one at the Mandarin for almost $12 million ($2428/sq. ft.) and the other at The Ritz-Carlton for $6.7 million ($1622/sq. ft.). This is indicative of the strength of sales in the seven figure range, as first quarter sales for Boston $1 million+ properties are coming in at record pace, accounting for 27% of all sales. Tops on the list, the deal for the property at 96 Beacon St., which closed for $13 million ($2051/sq. ft.) in March. The average for these properties is $1012 per foot.

Boston $1 Million+ Properties

Overlaying the performance of the Boston Luxury and $1 Million+ properties against the Downtown market as a whole, we can see that the increase in the average price per sq. ft. has been even more dramatic in the larger market. The average shot up nearly 7.5% this quarter, compared to the 3% increase in the Luxury market and 5% in the $1 Million+ market. This demonstrates that prices are rising in all sectors of the Downtown market, not just at the top, and rising sharply. There is one Luxury property that bears singling out, however.

Average Price Per Square Foot

Resales at The Ritz-Carlton Towers have been nothing short of spectacular. The average price per sq. ft. has jumped 16% this quarter, and a whopping 36% since the end of 2012. Every sale at The Ritz this year has topped $2000/sq. ft. Coupled with the sellout success of Millennium Place, 2013 was truly a stellar year at the corner of Avery and Washington, as owners who sold at The Ritz had a record year, and are realizing they are in possession of some of the most coveted properties in downtown.

Median Gross Price By Year

So what kind of numbers are homeowners getting? As the chart to the right shows, if they’re at the Ritz, it’s top dollar. Luxury market owners are getting a median price of $1.29 million. That is slightly less than the $1.45 million garnered when considering only sales of $1 Million or more. At The Ritz, the median is more than 60% higher, at $2.35 million. The Ritz greatly benefited from sales across the street at Millennium Place, validating the area as a premier luxury neighborhood in the city.

Given the first quarter sales numbers, the Boston condo market is on pace to increase sales yet again. Let’s recall the numbers from last year (see graph below). The Downtown, Luxury and $1 million+ markets sold 329, 396 and 682 units respectively in 2013. Extrapolating from the first quarter, the 2014 totals would be 448, 472 and 660. That would be an average increase of 12%, the fifth straight year condo sales in these sectors have trended upward.

We are certainly off to a booming start for 2014, and you can continue to follow all the trends right here every month. Please leave your comments below and we’ll be back in May with an updated edition of the Cutter Report.